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Refining a subsidiary evolution framework: clarifying key concepts

Refining a subsidiary evolution framework: clarifying key concepts While the evolution of subsidiaries has received considerable research attention, the framework for understanding it has not evolved much since the late 1990s. The purpose of this paper is to add both clarity and depth to the work on the foundations for – as well as the processes of – capability creation and development as a subsidiary evolves.Design/methodology/approachThis conceptual paper takes as its point of departure the micro-foundation literature, with a specific emphasis on the capability development literature. To describe capability creation and development, both the resource-based view and the resource management perspective are used here.FindingsThe paper adds a conceptual layer to the drivers of subsidiary evolution. To add further clarity regarding how capabilities are actually formed, the resources for capability creation and development are specified herein as entities, abilities and capacity. Arguments are also presented for why capabilities ought to be viewed as patterned behavior to decrease the terminological ambiguity surrounding the concept of capabilities. The process of capability creation and development with an emphasis on learning is brought forward. Further, capability typologies, in terms of substantive, managerial and dynamic capabilities, are presented to add specificity to the kinds of capabilities that are created and developed within a subsidiary.Originality/valueClarifying the concept of capability and how capabilities are formed by using advancements in the literature is important to add precision to the literature on the evolution of subsidiaries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of International Business and Strategy Emerald Publishing

Refining a subsidiary evolution framework: clarifying key concepts

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2059-6014
DOI
10.1108/ribs-03-2020-0029
Publisher site
See Article on Publisher Site

Abstract

While the evolution of subsidiaries has received considerable research attention, the framework for understanding it has not evolved much since the late 1990s. The purpose of this paper is to add both clarity and depth to the work on the foundations for – as well as the processes of – capability creation and development as a subsidiary evolves.Design/methodology/approachThis conceptual paper takes as its point of departure the micro-foundation literature, with a specific emphasis on the capability development literature. To describe capability creation and development, both the resource-based view and the resource management perspective are used here.FindingsThe paper adds a conceptual layer to the drivers of subsidiary evolution. To add further clarity regarding how capabilities are actually formed, the resources for capability creation and development are specified herein as entities, abilities and capacity. Arguments are also presented for why capabilities ought to be viewed as patterned behavior to decrease the terminological ambiguity surrounding the concept of capabilities. The process of capability creation and development with an emphasis on learning is brought forward. Further, capability typologies, in terms of substantive, managerial and dynamic capabilities, are presented to add specificity to the kinds of capabilities that are created and developed within a subsidiary.Originality/valueClarifying the concept of capability and how capabilities are formed by using advancements in the literature is important to add precision to the literature on the evolution of subsidiaries.

Journal

Review of International Business and StrategyEmerald Publishing

Published: May 17, 2021

Keywords: Subsidiary; Capabilities; Resources; Resource-based view; Evolution; Resource management; Multinational enterprise

References